Talks begin over possible sale of Tata Steel UK's Speciality Steels business
Tata Steel UK has announced the signing of a letter of intent with Liberty House Group to enter into exclusive negotiations for the potential sale of its Speciality Steels business for an enterprise value of Â£100m.
The letter of intent covers several South Yorkshire-based assets including the Rotherham electric arc steelworks, the steel purifying facility in Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, in the UK, and in Suzhou and Xi’an, China. Speciality Steels employs about 1,700 people, who make steels for the aerospace, automotive and the oil and gas industries.
Bimlendra Jha, CEO of Tata Steel UK, said: “The Speciality Steels business is independent of the pan-European strip products supply chain and today’s announcement is in line with the overall restructuring strategy of the UK portfolio. This is an important step forward in seeking a future for Speciality Steels and we have reached this stage thanks to the efforts of employees, trade unions and management.
“We now look forward to working with Liberty on the due diligence and other work streams so that the sale can be successfully concluded. We will continue to work closely with trade unions and will communicate any material news on this issue to the employees on an ongoing basis.
Mr Jha added: “We continue to actively seek solutions to the company’s structural challenges and work with all stakeholders. Among those challenges, there is the need to develop a more sustainable business in the UK as well as a self-sustaining future for the British Steel Pension Scheme.”
Tata Steel UK has invested £1.5 billion of capital over the last nine years.